7 August 2024
3 min read
If your business is struggling to meet financial obligations, like payments to suppliers, landlords, employees or the Bank, you might already be in financial difficulty.
It can happen for lots of reasons including cash flow problems, reduced turnover and delays in invoices being paid.
Negative cash flow means a bank balance decreases over time. One-off occurrences of negative cash flow are normal but if this stretches for months then your business is likely to be experiencing financial difficulty.
Find steps you can take to manage your business cash flow and get your business on a stronger financial footing in our how to manage cash flow in your business article.
Persistent reduction in turnover and forecasted sales should also raise alarm bells.
If your business turnover is falling this may mean there is a decline in demand for your products or a loss of customers. It is important to understand the reasons for this and take the appropriate action.
There are many reasons why your business may be experiencing reductions in profit. It may relate to the cost of raw materials or overheads so this needs to be carefully monitored.
The key is to be proactive with measures that will put your business back on track.
Another red flag is regularly missing payments to suppliers or your creditors. Any difficulty in meeting these obligations usually points to a troubling financial situation.
If you need support with debt, you can find resources from:
If you are concerned about meeting your loan repayments to us, make sure you email our Business Support Team to discuss this before the repayment date.
Employees may leave for many reasons but having an unusually high staff turnover is a cause for concern.
If your business is experiencing this, it is important to identify the cause and take action to stop and reverse the trend.
If customers owe your business money and keep extending their payment terms, it can be hard to know the best thing to do. It is important to communicate clearly with the customer to tell them how much money they owe and when this payment is expected.
To cut down on late payments, you could try Go Get Paid. This business tool is free to Co-operative Bank business customers and helps to manage your payments easily, send invoices and receive payments on the go.
Find out more about Go Get Paid
If you need further support or would like to talk to someone about your business’ financial difficulty you could try these ideas.